Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

I recently represented a client at a court hearing on a motion to compel appraisal to determine the amount of roof damage from Hurricane Wilma. The insurance company’s attorney opposed appraisal, so the judge asked him who other than appraisers should determine the amount of damage from Wilma. “I’m not getting on that roof!” exclaimed the judge. “Are you getting on the roof?” he asked the insurance company’s attorney before looking at me and asking me the same question. As much as I wished I were qualified to differentiate between hurricane damage and wear and tear, I admitted that such a decision should be left to the experts. That experience led me to ponder on the subject of experts.

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Just a few weeks ago, the Fort Myers Division of the United States District Court for the Middle District of Florida handed down its memorandum opinion on the insurer’s motion for summary judgment in Royal Marco Point I Condo. Ass’n, Inc. v. QBE Ins. Corp., No. 3:07 CV 16, 2010 WL 2757240 (M.D. Fla. July 13, 2010). Among other things, the insurer, QBE Insurance Corporation, argued that its participation in appraisal and timely payment of the appraisal award precluded an action against it on bad faith.

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A frequent issue that lawyers, adjusters and other insurance industry experts address in Florida involves policyholders’ failure to timely report their Hurricane Wilma claims to the insurance carriers. Often times, a policyholder is unaware of his or her rights and obligations under the policy and Florida law, and is unfamiliar with finding and determining damages to property. Also, policyholders have often heard horror stories of insurers canceling policies after one claim. Some policyholders try to make repairs themselves to avoid the headache of presenting a claim and going through the claim process. When the problem re-presents itself and the policyholder decides to file an insurance claim, a significant amount of time has passed since the date of loss.

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(Note from Chip Merlin: This guest blog is by Shaun Marker, an attorney with Merlin Law Group in our West Palm Beach office)

As many homeowners, condominium owners, directors, property managers, and public adjusters are aware, the Florida statutes of limitation are approaching for Hurricanes Katrina and Wilma. There has been much litigation in Florida related to these catastrophic events, however, we are not out of the woods yet…and we may not be even once the limitation periods pass. The scope of this post relates to the fiduciary duties that condominium and homeowner associations and their boards of director have to maintain and repair damages to the common areas of these communities.  

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(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series he is writing on post-loss duties). 

In Florida, discovery in breach of contract actions usually centers around the mystical “claim file” which insurers guard more closely than their first born child. As most who read this blog already know, the “claim file” has been held to be generally protected by Florida courts, and usually undiscoverable in a breach of contract action.

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(Note: This Guest Blog is by Corey Harris, an attorney with Merlin Law Group in the Tampa, Florida, office. This is part of a series he is writing on post-loss duties). 

One of the most daunting tasks in submitting an insurance claim is the production of documents. Most insurance policies have language similar to the following:

The insured, as often as may be reasonably required, shall produce for examination all writing, books of account, bills, invoices and other vouchers or certified copies thereof if originals be lost, at such reasonable time and place as may be designated by the company or its representatives, and shall permit extracts and copies thereof to be made.

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The Hurricane Katrina insurance coverage litigation along the Mississippi Coast was a once in a lifetime event for most attorneys. For me, it was obvious from the first day we landed at Stennis airport that this was where the Super Bowl of insurance coverage litigation was going to be waged for the next several years. With a lot of help from Florida panhandle trial attorneys Larry Keefe and Sparky Lovelace (Sparky quickly left our venture and started work with his long time friend, Dickie Scruggs), we decided to build two law offices--one in Bay St. Louis and the other in Gulfport. Teenage friends of mine who were local attorneys without law offices as a result of Katrina, Randy SantaCruz and William Weatherly, agreed to sign on with our efforts after Cindy Cady recruited them. With insurance claim denials and low payments running rampant, we were overworked with cases and clients. We already had transferred Jason Ciofalo from Tampa to work full time in Mississippi, and Deborah Trotter was working full time with Randy Santa Cruz out of the Bay St. Louis office.

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The Windstorm Conference is in full swing. I was introduced to an engineer, Bruce Holmes. He told me that he was very upset with his colleagues and others in the insurance industry. He asked if I could refer others to his website where he has a proposal for change and action.

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My appointment by Florida's Governor Charlie Crist to the Citizens Mission Review Task Force afforded me the opportunity to learn about and have a small voice in the Florida insurance marketplace. At War With the Weather: Managing Large-Scale Risks in a New Era of Catastrophes is a significant academic work which our regulators and legislators must read and understand to fully appreciate the complexity of the property insurance issues in Florida and elsewhere. I wish it had been published while I was serving on that Committee. The historic lessons and current conclusions contained in this book are important to everybody living and working along Coastal areas.

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(Note: This Guest Blog is by Ruck DeMinico, Knowledge Manager with Merlin Law Group).  

In State Farm Florida Ins. Co. v. Seville Place Condominium Ass'n, Inc., No. 3D08-2538, ___ So. 3d ___ (Fla. 3rd DCA, October 14, 2009) Florida’s Third District Court of Appeal held that an insured could amend their complaint to add a bad faith claim after coverage was admitted by the insurer and an appraisal award had been entered, but before final judgment. 

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I once told an Allstate Insurance Company adjuster that if forced, I was going to sue over a very small matter, less than a thousand dollars, because it simply was not right that Allstate was taking “betterment” deductions on the adjustment of an automobile comprehensive coverage loss to a friend of mine. This small county court case eventually resulted in a significant class action settlement in Florida in excess of $20 million dollars. I have no idea why some insurance companies do not try to settle earlier and would rather wait until the information uncovered results in a bad situation getting worse. Unfortunately, unless the litigation fortunes of one public adjusting company changes dramatically on appeal, a seven thousand dollar fee dispute could cost many public adjusters millions in class action lawsuits.

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As this is being posted, I am providing an ethics seminar to Florida public adjusters along with Merlin attorneys Bob Reynolds and Michelle Claverol. This follows my earlier posts on the topic, Public Adjusters Sued in Class Action for Wrongful Conduct--Are Unauthorized Practice of Law Class Action Suits Next? and Public Adjusters Targeted by Lawyers for Overcharging Policyholders.

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Most insurance policies contain a liberalization clause. Always look for them because a liberalization clause means that any change in the law broadening coverage would benefit the policyholder, even if the change happened in the middle of a policy period. One Florida court, however, recently took a narrower view on a liberalization clause's applicability.

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In the last week, two Florida cases have been released which discuss prejudgment interest.

In Sunshine State Insurance Co. v. Davide, 34 Fla. L. Weekly D1422a (Fla. 3d DCA 2009), Florida’s Third District Court of Appeal held that when an insurer erroneously withholds a portion of a payment due, the insured is entitled to prejudgment interest on the amount not timely paid from the date the payment became due under the policy, not from the date the property was damaged. As I will explain at the end of the case summary, this case applies only to pre-2007 claims. On July 11, 2007, consumer friendly legislation took effect which would have provided Davide with a statutory right to interest from the date Sunshine received notice of the claim.

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As we have seen with the Katrina and Wilma litigation, courts will enforce the anticoncurrent causation clause, standard in most all risk and wind insurance policies. Many who suffered total losses could not fully recover because they did not have adequate flood insurance. Generally, policyholders with insufficient flood coverage limits fall into three categories:

1. Those who did not purchase flood coverage.
2. Those who underestimated the value of full replacement cost.
3. Those correctly estimating replacement coverage but not able to purchase the amount through National Flood.

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Amy Boggs has an interesting case against QBE Insurance Company which has recently moved from the contract portion of the case to the claims practice a/k/a Bad Faith case. The condominium client we represent is The Dorsett House Condominium Association which was damaged from Hurricane Wilma. QBE Insurance Company insured many condominiums in Florida and has been the subject of much criticism. It recently lost a trial where the verdict on the contract damages was over $20 million.

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(*Note:  This Guest Blog is by Jean Niven, an attorney in the Tampa office of Merlin Law Group).

Hurricane season is fast approaching, leaving coastal residences and businesses vulnerable to the whims of Mother Nature. Surviving natural disasters should not be just a warm up to the difficulties encountered in filing an insurance claim. The purpose of insurance is to provide peace of mind. When disaster strikes the insurer is tasked, pursuant to Florida law, with providing prompt assistance in the form of a competent adjuster who has the best interest of the insured as its first priority. Sadly, that scenario has become a fairy tale for many insureds. Instead of providing the friendly professional assistance advertised in TV commercials and on bill boards, the insured is frequently faced with obstructionist tactics designed to wear down even the most stalwart of personalities. This at a time when a person is most vulnerable and frequently has limited financial capability.

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The probability of a ruinous event happening may change behavior or cause you to insure to reduce the misery. The greater the financial misery, the more likely you are to insure yourself when it strikes. The greater the chance of the event happening, the more likely you will take measures to avoid the misery.

The American Association of Insurance Services recently published its Homeowners Cause of Loss Report. It details the cause of reported losses from 2005 through 2007 for property and liability payments on Homeowners policies. While the expanded version which lists the cause of loss by state is not available to the public, the property loss statistics are informative:

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A Broward County Court has approved a class action settlement on behalf of more than 12,000 State Farm Insurance policyholders in Florida who will receive 100 percent of the damages they requested in a $6.8 million settlement of claims filed last year in which they alleged the insurer refused to pay replacement costs of screen enclosures damaged by Hurricanes Katrina and Wilma, attorneys for the plaintiffs announced. Read more....

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